The answer to the question "is credit card debt ever forgiven?" is a resounding ... sometimes, and sort of.
For starters, if you are asking to get your credit card debt forgiven, you need to have some very good reasons for doing so. As in, you've been injured and can no longer work, or you've racked up crushing medical bills in the fight for your son's life. That sort of thing.
Forgiveness isn't a free pass
Additionally, once you've made it past the credibility test, credit card debt forgiveness almost never means walking away from a credit card debt scottfree. What it will mean is a reduction in a bill of, say, $10,000 to $5,000, or a cancellation of the interest on the debt, or reduction of the interest rate to something very low.
Declaring bankruptcy is different from debt forgiveness
Declaring personal bankruptcy, however, is another story altogether. When you declare bankruptcy, you will go to bankruptcy court, where a judge will determine whether your debts are to be canceled or whether you'll have to pay them off under different, more favorable terms. Declaring bankruptcy is a huge step, however, and needs to be thought through.
Don't forget the tax man
It is also important to remember that forgiven debt is very often considered taxable by the IRS. So, to return to the scenario of $10,000 in credit card debt, let's say the credit card company forgives $5,000. That means that in the final analysis, you paid $5,000 for $10,000 worth of stuff, or cash advances, or a combination of both. The IRS sees that $5,000 as income, and they want their share of it.
To learn more about credit card debt, credit card debt forgiveness, bankruptcy and any other aspect of debt, be sure to consult with a debt counselor or a financial adviser. You're going to need their expertise to help you navigate through the tricky steps and particulars of negotiating credit card debt forgiveness.
